Several key parcels in Baltimore's Clipper Mill development were bought back at auction by the lender for $2.425 million Thursday in a foreclosure sale following the default on bank loans by the developer, Struever Bros., Eccles and Rouse.
The auctioned properties included more than two dozen incomplete upscale homes in the 38-unit Overlook at Clipper Mill subdivision and the shell of the Tractor Building, a remnant of the old Clipper Mill Industrial Park. The sale was handled by Alex Cooper Auctioneers on behalf of BB&T; Bank, the lender. It means that the bank will now gain control of the unfinished properties from Struever and can take steps to find buyers for them. Representatives for the bank declined to comment after the sale.
The auction, held on the steps of the Clarence M. Mitchell Jr. Courthouse, drew more than three dozen onlookers, including developers, Clipper Mill residents and creditors of Struever Bros. The 17.5-acre development has been built in phases off Clipper Park Road and includes apartments, townhouses, offices, artists' studios and commercial ventures such as Woodberry Kitchen.
According to a foreclosure case filed Nov. 2 in Baltimore City Circuit Court, Struever's limited liability company, Clipper for Sale LLC, owed mortgage debt of $3.8 million on the unfinished Overlook properties. A second case filed Nov. 6 showed an additional $1.25 million owed to the bank on the Tractor Building and nearby land.
At Thursday's auction, the bank representatives bid $2 million for the Overlook properties and $425,000 for the 42,000-square-foot Tractor Building and surrounding land. No one else bid for the Overlook properties, while the Tractor properties drew several lower bids before the bank stepped in to acquire them.
Having gained control of the Clipper Mill properties with the auction, the bank is now in a legal position to bring in a workout team to sell them. Although the bank representatives declined to say what they plan to do, residents and commercial tenants interviewed at Clipper Mill and at the auction Thursday had no shortage of suggestions for ways to get the project back on track.
Several residents of the upscale Overlook houses said they would urge the bank to complete work on the unfinished houses as they were designed and permitted by the city of Baltimore and put them on the market as quickly as possible. They noted that several of the houses are nearly complete and need only appliances and finishing touches, while others need siding on the exterior to protect the buildings during the winter. Still others have just the foundation in place or have not been started at all.
"I was hoping they would finish off what they started," said Lucy Rouse, an Overlook resident and former wife of Ted Rouse, a former principal of Struever Bros. "The exteriors need to be completed. It would be a shame to drop it in midstream."
The Clipper Mill residents and tenants said they don't believe the auction is a reflection of the quality of the development. They said they think the project and developer got caught in the national economic downturn that has made it difficult for builders and home buyers to obtain construction financing. They note that the Clipper Mill development has sparked rejuvenation of other properties nearby and served as a model for other mill conversions in the Jones Falls Valley.
"It would be nice if the houses got finished. They started them. They should be completed," said Paul Daniel, a sculptor with a studio at Clipper Mill. "It's a shame that it happened to Struever, but you could say it was a result of the economy. They were doing what they thought was right. They have a whole resume that would be considered a success in Baltimore."
Daniel said he has had a sculpture studio at Clipper Mill for more than 30 years and saw drastic changes when Struever began redeveloping the area several years ago. "What it had been prior to renovation and what it is now is a tremendous improvement," he said.
Nancy Graboski, owner of a gallery and frame shop at Clipper Mill called American Art Resource and Frame Co. (formerly Gallery G at the Beveled Edge), suggested that the bank work with a home remodeling program on TV to recycle the Tractor Building.
"Put it on one of those reality shows," she said. "Put a call out and see what can be done. This is such a magnificent property. Maybe it can be creatively used by some entity out there that, if given the chance, could do something remarkable with it."
Architect Ed Hord, a principal of Hord Coplan Macht, said his firm was Struever's architect for the cavernous Tractor building and had developed plans for converting it to a mixture of housing, offices and parking.
Hord said the project was not able to obtain state tax credits for historic preservation, and that made it difficult for Struever to proceed with construction before the lending market collapsed. He said the best chance for a rehab project to move forward would be if Maryland's General Assembly next year authorized sufficient preservation tax credits for projects such as the Tractor Building.
Hord said the positive outcome of Thursday's auction is that it removes some uncertainty surrounding it, because the unfinished Clipper Mill properties are now in the hands of a lending institution that can find a way to resume development.
"The good thing is it's out of limbo," Hord said of the Tractor Building "It's a fantastic building. It has amazing potential. ... If the bank wants to get it off their books, something will happen."
Baltimore Sun reporter Lorraine Mirabella contributed to this article.